Business hits maternity plan

Big business will today warn the Productivity Commission that firms will be financially “damaged’’ if they are forced to pay superannuation for women who are off for 18 weeks looking after their newborn babies.

The Australian Mines and Metals Association will appear before the first hearing looking at the Productivity Commission’s paid maternity leave model.

It will argue against a key part of the scheme that would force business to pay new mothers maternity leave before receiving reimbursement from the Government.

The AMMA’s director of workplace policy, Christopher Platt, said the system was unworkable and would cause hardship to business.

“It’s an increased obligation with minimal productivity offsets and in that case it doesn’t help us compete internationally at all,’’ he said.

The Productivity Commission’s report called for mothers, or fathers if they are the primary carer, to be given 18 weeks’ leave paid at the minimum wage, currently $543 a week. Employers would initially pay the wage but would be reimbursed by the Government.

Employers would also be required to pay 9 per cent superannuation on any government parental leave payments. The commission said employers would be up for an additional $74million a year.

“For some reason we’ve got to pay a 9 per cent amount (of superannuation) ... we don’t think that’s fair,’’ he said.

“Under the proposal, businesses can receive a reimbursement from the Government but essentially we would be providing a cashflow for the Government,’’ he said.

But Mr Platt said business could not support the structure suggested by the Productivity Commission.

“Our point is that business shouldn’t have its cashflow adversely impacted to provide this service and if the Government is providing direct payments for some employees than it should do it for all employees,’’ he said.

Mr Platt said the way the commission had designed the scheme would add a burden to business it could not afford. “It will add a cost burden on the employer to make the payment. The payment for a number of people will be less than their normal payment so that means that the payroll arrangements will have to be changed,’’ he said.

In addition, he said the businesses would have to recoup the money from the Government.

“The fact remains there will be a four- to eight-week lag in getting that back and that’s an adverse impact on cashflow which will potentially affect small business,’’ he said.

Federal Sex Discrimination Commissioner Elizabeth Broderick has pleaded with the Rudd Government not to abandon paid maternity leave after proposed funding for the program was booted off a spending list for next year’s budget.

Ms Broderick this week urged the Government to reconsider the economic benefits of a taxpayer-funded maternity leave scheme, despite the budget cuts being forced by the global financial crisis.

“A federally funded scheme not only assists families, it is also beneficial for business and for the community,’’ she said.

The Sex Discrimination Commissioner aired her deep disappointment after Finance Minister Lindsay Tanner confirmed that paid maternity leave was likely to be among a range of spending allocations “kicked off’’.

Mr Tanner said Labor would honour all spending promises made during the election campaign, including tax cuts.